Target has agreed to pay MasterCard-issuing banks up to $19 million to reimburse losses related to the 2013 data breach that compromised up to 40 million accounts.
The settlement will help compensate for costs the banks incurred while cancelling and creating new accounts, and sending out new cards. The settlement agreement requires at least 90% of eligible MasterCard account issuers to accept the offer.
Estimated costs associated with the bank settlement already are reflected in the data breach liabilities that Target established during the 2013 and 2014 fiscal years.In March 2015, Target agreed to pay $10 million to settle a consumer class-action suit tied to the breach.
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Target disclosed in a recent financial filing that it has incurred $252 million in breach-related expenses.
“We are hopeful that Target’s agreement to pay up to $19 million to settle the claims of MasterCard and its issuers will result in a high level of issuer acceptance,” said Scott Kennedy, President of Financial and Retail Services at Target. “Target intends to continue to defend itself vigorously against any assessments made by MasterCard on behalf of MasterCard issuers that do not accept their offers.”
MasterCard issuers will be paid by the end of the Q2 2015, according to a company statement.
